A sum of R2-million that former president Nelson Mandela gave to
Deputy President Jacob Zuma in October 2000 was used to pay the debts of Zuma
and Schabir Shaik's Nkobi Holdings, the Durban High Court heard on Wednesday.

The state says Mandela's money was intended for the
KwaZulu-Natal Reconstruction and Development Programme (RDP) Education Trust
Fund.

The court also heard how money was later deposited into
Mandela's account from an unknown source.

According to the findings of a forensic audit by Johan van der
Walt of auditing firm KPMG, only R1-million was paid into the trust account for
the benefit of the Jacob Zuma Education Trust, and was later transferred to an
unknown beneficiary.

Shaik, who was Zuma's financial adviser at the time, then sent a
fax to Absa with instructions to transfer R900 000 from Zuma's cheque account to
a one-month fixed-deposit account.

This account was in the name of Floryn Investments, a Nkobi
subsidiary.

Van der Walt told the court it is evident the money was later
used to "reduce overdrawn bank balances" of Nkobi subsidiaries.

The remaining R100 000 in Zuma's account was then used to pay
his debts.